HARARE – Zimbabwe owes South African Airways (SAA) and other international airlines $177.6 million in funds that could not be repatriated.
Zimbabwe has been facing foreign currency shortages since 2016 resulting in institutions and individuals with foreign debt exposure failing to repatriate money out of the country.
Firms wanting to pay dividends to foreign shareholders as well as those with international headquarters are also caught up in the predicament of failing to recoup their investments and earnings.
The Zimbabwean government has since admitted this debt in budget planning documents, but is still to provide any detail on how it will expunge this debt although it has previously hinted at issuing a debt instrument to the affected companies including SAA and Airlink.
According to Section 51, subsection 1 of Zimbabwe’s 2021 Finance Act any liability payable in foreign currency that was incurred by any of the persons specified in the Act before the February 22, 2019, and in respect of which such foreign currency could not be repatriated from Zimbabwe, shall constitute blocked funds qualifying for relief.
According to Act No. 7 of 2021 Finance Act, the Zimbabwe government is liable for $2.5 billion for funds belonging to foreign counterparties, that provided loans and credit facilities to “a person resident in Zimbabwe,” but could not be paid when the funds were due.
Among these foreign counterparties is SAA which is owed an outstanding amount of $7 million after the initial amount was reduced from $18.7 million.
Emirates is the most exposed airline with at least $51.2 million still outstanding, according to the Finance Act enacted by the Parliament and the President of Zimbabwe, and released last week.
South Africa’s Airlink is owed $975, 000.